How could this occur when the U.S. is one of the world's largest plastic consumers and produces a massive volume of throwaway single-use plastic water bottles, peanut butter jars, coffee drink bulbs, straws, candy wrappers, and hundreds of other forms of packaging and containers?

The country's overall plastic recycling rate (not including never-used post-industrial plastic waste) has been estimated at just 10%-12% each year, and 2024 was no different. Several market participants have spoken about the urgent need to increase plastic recycling.

This ironic situation is the result of insufficient sorting capabilities at plants that take in trash and single-stream recyclables collected weekly from residences, and, in some cases, businesses.

These material recovery facilities operate across the country and are charged with collecting trash and disposing of it in landfills or burning it in trash-to-energy operations. Sorting out recyclables is important, but the first order of business is making sure the trash is collected and disposed of, week after week.

Some MRFs have optical sorting equipment that can suck polyethylene terephthalate plastic bottles off conveyor belts loaded with waste offloaded by trucks. The PET bottles are collected and bundled up in cube-shaped bales and trucked to plants that recycle them into recyclates for blending with petrochemical-produced PET resin to make new bottles, PET packaging like takeout boxes, and other PET products. Some MRFs have sorters that separate out high-density polyethylene bottles and containers, like laundry detergent jugs, and polypropylene, like yogurt cups, which are also baled and trucked out.

But not enough MRFs have sufficient sorting capacity to meet demand from the recyclers looking for the most sought-after plastic waste commodities--PET, HDPE and PP.

"It's a very expensive business," Michael Lipton, president and owner of Arizona Pacific Plastics in Phoenix, which recycles about 19 million lb/year of plastic waste into flake (also referred to as regrind). "This business requires lots of land, manual labor, expensive equipment, power [and] the barrier to enter is high. It's a lot cheaper to throw plastic waste in a landfill than recycle it. Also, I don't believe there's auditing that requires MRFs to show they've recycled a certain volume of plastic waste. There's no accountability for not recycling plastic."

At the same time, millions of pounds of plastic waste commodities are bought and sold daily. In some cases, a shortage will create a classic supply/demand dynamic of soaring (or plummeting) prices, like the current price of HDPE natural bales, which include milk and dairy jugs and containers.

As of mid-December, prices were at 73cts/lb, FOB east of the Rockies, according to PetroChem Wire by OPIS. This was up from 30cts/lb a year earlier, or 143%.

Underscoring natural bales' high cost has been strong demand for what they are used to produce: HDPE natural post-consumer resin in pellet form. This PCR is used in the manufacture of new dairy containers, plastic furniture and other products. PCR demand itself is tied to demand from manufacturers who require recycled plastic to be in their containers, packaging and products.

In specific markets, PET bales remained the highest volume plastic waste commodity in 2024. The price in mid-December for curbside PET bales (mixed colors) was 17.5cts/lb FOB east of the Rockies, up from 12cts/lb a year earlier.

In California, one of 10 states that requires a deposit for PET bottles purchased at the retail level, Grade A redemption PET bales were at 24cts/lb delivered in Southern California and the Oakland area, up from 16.5cts/lb a year earlier.

More of the Same in 2025?

In the U.S., reams of single-use plastic will be produced, and an estimated nationwide average of 10%-12% of what's used will be collected, sorted, and baled and recycled.

But the primary reason the U.S. remains a plastic recycling laggard compared with nations like Canada and Germany is the absence of legal requirements.

There are incentives in 10 states, requiring deposits for PET bottles, although no one is forced to feed their bottles into the redemption machine to get their money back. But there are no national laws that require plastic waste to be recycled.

Producer extended liability laws, which are again in effect only in some states, have the potential to tackle the plastic waste problem at its source. If you make it, you own it, and you are responsible for whatever happens to it, wherever it ends up.

To increase the plastic waste recycling rate, a national law or laws would have to be enacted to require trash and recyclables haulers, including the publicly traded companies operating hundreds of MRFs, to extract more recyclables from the discarded material they collect and sell it to recyclers. The recyclers would continue to unpackage the bales and melt the waste into recyclates for use to make new plastic products. A failure to recycle would be subject to fines.

The intricacies of this system need to be determined in Congress, which will be no easy feat given a new administration is set to take office in 2025. Getting national recycling legislation passed is not expected to be a priority, at least in the early months of the new administration.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

(Reporting by Xavier Cronin, xcronin@opisnet.com; Editing by Anna Matherne Maldonado, amatherne@opisnet.com and Jeff Barber, jbarber@opisnet.com)